Volume 2009, Issue 341,
June 2009

The "CASH-IS-KING" mantra and the massive declines experienced in equities in the last 18 months has resulted in towers-of-Pisa-like walls of cash looming on the sidelines. But some experts think this could lead to problems down the line.

A member of the congregation I serve as minister recently tried to pick my brain on a ''habitatio'' she was having difficulty trying to understand. Thinking at first she said ''haberdashery'', and about to tell her I knew nothing about sewing, I thought better of it and asked for clarification. All was revealed when she handed me a legal document headed ''Notarial Cession of Habitatio'', better known to tax practitioners and estate planners as a usufruct.

In recent times we have seen a number of cases of companies which have entered into a transaction without the necessary exchange control approval, purely because they were not aware that such approval was required.

The keynote speaker Philip Klapwijk, Executive Chairman of GFMS, offered a highly analytical presentation covering gold and silver that almost grudgingly conceded that despite highly adverse fundamentals, gold could still rise a little over the remainder of the year, but not by as much as many analysts believe because fundamentals are currently so adverse.

Coronation CEO Hugo Nelson stresses that his firm does not try to time the stock market. He was commenting on the reaction to a statement in the asset manager's financial results which noted ''there is little doubt that the bear market will continue for a sustained period''.

From time-to-time, it's a good idea to take a step-back and see the bigger picture. The charts presented in this article plot the one year rolling returns for different unit trusts against the best, average and worst returning unit trusts. My intention is to highlight the transient nature of the relative returns between different investments, and the importance of developing the correct expectations about the nature of one's short-term investment returns.